Bill > HB739

This bill modifies the interest rate calculation for deferred or abated ad valorem (property) taxes on certain residential homesteads. Currently, when homeowners defer or delay paying property taxes, a flat 5% interest rate applies. The bill changes this by introducing a new interest rate calculation where the annual rate will be the lower of either the five-year Constant Maturity Treasury Rate (a benchmark interest rate reported by the Federal Reserve as of January 1 of each year) or 5%. This means homeowners might benefit from lower interest charges during tax deferral periods if the Treasury Rate is below 5%. The bill applies to interest accrued during tax deferral periods before and after September 1, 2025, specifically for unpaid taxes. The legislation preserves existing penalties and interest that accrued before the tax deferral and maintains that no new penalties will be incurred during the deferral period. The bill will take effect on September 1, 2025, providing a potential financial benefit for homeowners who qualify for tax payment deferrals by potentially reducing the interest they owe during those periods.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB739